Explain Why a Firm's Long-Run Total Cost Is No Greater

question 48

Essay

Explain why a firm's long-run total cost is no greater than its short-run total cost.Under what circumstances will the two be equal?

---

Definitions:

Current Ratio

A financial metric used to evaluate a company's ability to pay short-term obligations with its short-term assets.

Current Assets

Short-term resources expected to be converted into cash within one year, including cash, inventory, and accounts receivable.

Current Liabilities

Obligations or debts that a company is expected to pay off within one year or within its normal operating cycle, whichever is longer.

Creditor's Decision

The process through which a creditor analyzes the financial stability and creditworthiness of potential borrowers before lending money.